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Internet retailer Overstock has announced that it intends to become the very first major US-based company to pay a part of its state business tax in Ohio using Bitcoin.

Taxes With Bitcoin

According to its own investor portal, US-based internet retailer Overstock is set to pay part of its Ohio state business tax using Bitcoin. Supposedly, by doing so, the retailer will become the first major US company to pay its taxes using the digital currency.

Speaking on the matter was Patrick M. Byrne, Overstock CEO and founder, who noted:

We have long thought that thoughtful governmental adoption of emerging technologies such as cryptocurrencies (when accompanied by non-restrictive legislation over these technologies) is the best way to ensure the U.S. does not lose our place at the forefront of the ever-advancing global economy. […] We are proud to partner with forward-thinking governments and officials like Ohio and Treasurer Mandel to help usher in an era of trust through technology for our nation’s essential financial systems.

Earlier in November, Bitcoinist reported that Overstock’s share price soared as the company announced plans to sell its retail-oriented business and to focus on previously acquired blockchain startups.

‘Ahead of Its Time’

Paying taxes with Bitcoin in Ohio became possible in late November 2018 at OhioCrypto.com.

According to State Treasurer John Mandel, who pioneered the idea, Overstock’s move to pay its taxes with the cryptocurrency is ‘ahead of its time’:

We applaud Overstock for becoming the first national brand in America to register to pay taxes via cryptocurrency. Their embrace of blockchain technology was ahead of its time and we’re proud to have them join OhioCrypto.com.

In an interview for Fortune, Mandel also added that paying taxes with Bitcoin reveals certain financial advantages. According to him, taxpayers who use credit cards pay 2.5 percent service fees, while those who use Bitcoin will only incur a fee of 1 percent. Early filers like Overstock, however, won’t incur any fees at all.

What do you think of Overstock paying part of its state business tax in Ohio using Bitcoin? Don’t hesitate to let us know in the comments below!

Ethereum not only hopes to maintain its position as one of the world’s largest cryptocurrencies but also to achieve supremacy by becoming more energy efficient. Ethereum leadership plans to accomplish this objective by minimizing blockchain energy consumption by 99 percent.

‘Ethereum 2.0’ PoS Blockchain Being Built From Scratch

Vitalik Buterin, inventor and co-founder of Ethereum, started 2019 by regaining Ethereum’s position as the second largest cryptocurrency with a market capitalization of over USD 15.5 billion.

However, Buterin admits that Ethereum mining now purportedly consumes more electricity than Iceland. Thus, to sustain or enhance its competitive advantage, Ethereum is aiming to reduce energy consumption by scraping its blockchain based on proof-of-work (PoW) and instead building an entirely new blockchain based on the proof-of-stake (PoS) algorithm.

In this regard, Vitalik says, “latest ETH update should complete transactions using just 1% of the energy consumed today by replacing PoW with PoS.”

Testnet in 2019? Don’t Hold Your Breath

Peter Fairley, a contributor editor for Spectrum IEEE, writes that energy reduction has been part of Buterin’s vision from the start, concurring that PoW consumes energy excessively.

Buterin envisions that future blockchains will be based on PoS and sharding. Sharding is a database-partitioning technique that involves separating huge databases into smaller, faster and more manageable components, known as data shards.

Blockchains of the future with proof of stake and sharding will be thousands of times more efficient, and so the efficiency sacrifices of putting things on a chain will become more and more acceptable.

The Ethereum devs decided on the two-blockchain solution in June 2018 dubbed ‘Ethereum 2.0.’ Ethereum contributor Paul Hauner, a co-founder of Australian cybersecurity and blockchain-development firm Sigma Prime, and heads the development of the ‘Lighthouse’ Ethereum 2.0 software client, that uses the Rust code. He expects this app and others to be running PoS on testnets in early 2019.

But due to multiple delays in the past and the complexity of the task at hand, may expect this new radical shift to Ethereum 2.0 to take time and it’ll likely not see the light of day in 2019.

“In October 2017, when mining time had already nearly doubled to 30 seconds, the Ethereum team reset the clock, delaying PoW’s doomsday by about 12 months,” Fairley notes. “And they will likely hit snooze again shortly.”

Weiss Ratings echoed this sentiment, saying they won’t be holding their breath, at least not in 2019.

#ETH mining consumes roughly as much electricity as Iceland. Vitalik says, latest ETH update should complete transactions using just 1% of the energy consumed today by replacing PoW with PoS. We’re not holding our breath for this one – at least not in 2019. #ethereum#crypto

Today’s Highlights

Please note: All data, figures & graphs are valid as of January 3rd. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Yesterday afternoon, shortly after the markets closed Apple came out with a shocking report.

Shares of the world’s largest company fell about 7% in after-hours trading and are expected to open this morning with a huge gap down.

At some level, just about every investor in the world who holds a stock portfolio has some exposure to Apple shares, that includes most pensions and investment portfolios in the world. Apple has already been under pressure from the tech rout but this new leg down bumps up the severity and further jeopardizes the entire market.

It’s not just stocks that are affected by this either. Shortly after Apple’s announcement, there was some very peculiar activity in the currency market.

The flash crash impacted almost all currencies but was felt strongest in the Japanese Yen. Japan is still closed for the holiday, so the thin liquidity, especially during the wee hours of the morning when most other countries are sleeping, was also said to have been a trigger for this flash crash.

As you’ll recall, the flash crash that happened in the British Pound on October 7th, 2016, also happened during the early morning Japanese session when volumes are lowest.

Here we can see the scope of the crash in the USDJPY on three different time scales.

Also, the second most affected currency seems to be the Turkish Lira. In this chart we can see the USDTRY repelling away from 200 day moving average (blue line), that it has been testing for a few weeks.

Day 13

As the US Government partial shutdown enters its 13th day, tensions couldn’t be higher. A meeting between President Trump and the Democrats ended very poorly yesterday, with neither side willing to compromise over the budget.

Today will probably be more of the same illiquid flight to safety markets. but you never know really and a turnaround or even a flattening is always possible.

Tomorrow, we’ll receive the monthly jobs report from the United States. This oughta be fun.

Crypto Setup

Gains across most of the popular cryptoassets have been rather mild lately. While it’s good to see bitcoin holding steady, we’re actually starting to see a side of the market that is more typical during a bull run.

Surges in alt coins are suddenly getting more common. Though I can’t quite explain what happened to Paragon, a cannabis-related alt coin, that went from 16 cents to more than $10 and back within a few hours on Tuesday. This could very well be a product of an illiquid market, similar to what we saw above.

However, more serious projects like Ethereum, EOS, and Iota have actually seen sustainable double-digit gains this last week.

What’s becoming clear is that there’s a large disconnect between cryptoasset pricing and industry growth. My comments to this effect were covered by Bloomberg yesterday, and I’m now considering adding “digital diehard” to my bio.

Kidding aside. We’ve tried to call the bottom of this market several times now without success, so I’ll reserve my predictions on that front. But, what I can say is that crypto has evolved from virtually nothing into an entire budding industry within 10 short years. I can only imagine what the next 10 years will bring.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Fred Wilson, the co-founder of Union Square Ventures, holds that 2019 will see the cryptocurrency market bottom out and ‘slowly’ enter a new bull run. However, he’s also concerned by actions of ‘misguided’ regulators.

2019: Finding the Bottom

Venture capitalist and co-founder of investment firm Union Square Ventures, has laid down his predictions on the overall state of the cryptocurrency market in 2019.

The investor believes that we are currently in the process of bottoming out. However, he thinks that this would take much of 2019 but it will be followed by “some bullish runs.”

I expect we will see some bullish runs, followed by selling pressures taking us back to retest the lows. I think this bottoming out process will end sometime in 2019 and we will slowly enter a new bullish phase in crypto.

Unlike others who’ve based their positive predictions on catalysts such as further market adoption, institutional money entering the market, infrastructure, and so forth, Wilson sees the premise of a new bullish run in the face of the results of promises made back in 2017.

I think the catalyst for the next bullish phase will come as the result of some of the many promises made in 2017 coming to fruition in 2019 […] I think we will see a number of “next gen” smart contract platforms ship and challenge Ethereum for leadership in this super important area of the crypto sector.

Another area where Wilson thinks 2019 will bring ‘meaningful progress’ and further adoption is stablecoins. He’s not alone on the matter.

Bitcoinist reported earlier in November that CoinJar’s co-founder Asher Tan also believes in the potential of stablecoins to solve the problem of volatility in the cryptocurrency space.

Regulatory Concerns

The venture capitalist also shares that there will be pressure on the cryptocurrency industry, in general. According to him, it will stem from ‘misguided regulators’.

The area I am most concerned about are actions brought by misguided regulators who will take aim at high quality projects and harm them.

Back in October, industry proponent Jeremy Allaire, CEO of investment application Circle, called for globally coordinated cryptocurrency regulations. At the same time, the Chairman of the US Commodity Futures Trading Commission (CFTC) J. Christopher Giancarlo urged regulators to apply a “do no harm” approach to cryptocurrency legislation.

Last but not least, Wilson thinks that scams, hacks, and overall failures are going to remain a “drag on the sector.” However, he also holds that this is normal and ‘always the case’ with emerging tech.

What do you think of Fred Wilson’s prediction of the cryptocurrency industry’s condition in 2019? Don’t hesitate to let us know in the comments below!

India’s long-running saga regarding the legality of cryptocurrency is likely to see a lifting of the current ban in 2019.

Indian Flip Flops

Reports suggest the Gov’t formed committee debating the matter are in favor of legalization, although with strong regulations.

India was a notable early adopter of Bitcoin, prompting the Reserve Bank of India (RBI) to issue its first cryptocurrency warning way back in December 2013. But Indians continued to embrace cryptocurrency with a fervor matched only by RBIs increasing animosity towards it.

Despite this, it is interesting to note that RBI was considering its own fiat-cryptocurrency, the Lakshmi, back in September 2017. In the end, though, it seems that the bank considered a ban to be a better solution.

But Who Banned What Exactly?

In April this year, RBI ordered financial institutions to stop providing services to businesses involved with cryptocurrency. Companies were given a three month grace period, so the ban came into force on July 5.

However, though the central bank’s position on the matter was made fairly explicit, the government’s position seemed increasingly at odds with this. Reports stated that the Indian government had no intention to enforce a blanket ban on cryptocurrency.

Ongoing Confusion

Lawyers for industry players are locked in an ongoing legal battle to repeal the RBI ban, which was allegedly implemented without any research being conducted.

RBI Headquarters in Mumbai

The government has been deliberating its final decision, suggesting that it may reach some conclusion before the end of the year. Meanwhile, the Supreme Court gave the government a two-week deadline to provide some clarity back in October – which it missed.

The government’s own suggested resolution date has again slipped back, and this latest report suggests the committee’s recommendations will come in February 2019 (a further delay).

When Clarity Comes

Companies are queuing up to (re)enter the Indian market if the ban does finally get lifted.

This includes social media giant, Facebook, which is supposedly working on a stable coin for WhatsApp. The initial focus of this venture is said to be the remittances market in India.

Will India eventually lift its ban on cryptocurrency? Share your thoughts below!

Projects which had their initial coin offerings (ICOs) on the blockchain of Ethereum have quickly liquidated their ETH holdings since June of 2018. Treasury withdrawals hit a year-high in December with more than 420,000 ETH being liquidated.

420,000 Ethereum Sold in December

Upwards of 420,000 ETH has been liquidated from ICO treasuries so far in December, making the month the largest withdrawal period this year according to Diar.

The market research firm also reveals some statistics for 2018’s prolonged bear market. In January, the total amount of ETH held in ICO treasuries was 4,623,148. Currently, this number has been reduced to 3,052,168 ETH. The average monthly withdrawal is 2.45 percent while December has seen 12.20 percent of Ether withdrawn from treasuries or a total of 423,816 ETH so far.

November was also a month of a massive selloff as over 290,000 ETH were liquidated, led by Tezos’ 82K ETH drawdown.

Sold at Year-Low

Almost half of the total withdrawn amount of ETH in December can be attributed to one single project – Filecoin. It sold off all of its holdings of 216,906 ETH.

Another project which liquidated almost all of its ETH holdings was Substratum, withdrawing 8,931 ETH in December.

Kyber, on the other hand, withdrew 66,454 ETH and is currently left with a little over 3,000 ETH in the treasury. The reasons for the selloff are undisclosed.

Looking at ETH’s 00 yearly price chart, however, shows that the third quarter has been particularly unforgiving for the cryptocurrency. In December, it fell down to as little as $83, which is almost 95 percent down from its all-time high values at the beginning of the year.

What do you think of Ethereum’s peaking treasury withdrawals? Don’t hesitate to let us know in the comments below!

Here at Bitcoinist we try to present you with the most comprehensive selection of relevant news stories in the crypto-verse. But sometimes great articles appear that don’t quite fit into our news cycle. So here is a small selection of some of the best pieces *not* on Bitcoinist this year, as suggested on Twitter.

Who doesn’t love a good origin story? But if you have superhero fatigue from all the Marvel movies, check out Dan Held’s origin story of Bitcoin. In it he draws parallels between the birth of Bitcoin and planting a tree.

An explanation of Bitcoin as analogous to real-estate contracts, written by a law professor, may not sound particularly accessible. But this paper by Eric D. Chason gives a great insight into the workings of Bitcoin.

He describes transactions as ‘deeds’ we must verify, and explains time-stamping with the example of Satoshi Nakamoto updating his will.

3. and 4. The Workings Of Proof-of-Work

Gregory Trubetskoy’s blog post explains how the blockchain utilizes PoW, simply as a distributed decentralized clock. Gregory describes the other functions of Proof-of-Work as essentially red herrings and poses the suggestion that a better name might be Proof-of-Time.

Okay, while not technically published this year, you may have missed this article from December 2017. Rusty Russell examines the past, present, and future of Bitcoin, as laid out in its mathematics and consensus rules.

The ghost of Bitcoin-past, with its negligible fees, noble aims, and a dearth of respectable uses, may now seem like a fairy tale. Christmas-future, when Bitcoin economics are dominated by fees, rather than block rewards, is still about ten years away.

But when it comes to Christmas-presents, you can still stuff my stocking with bitcoin, thank you very much.

GMO
Internet says it will no longer develop, manufacture, and sell Bitcoin
mining hardware following significant losses incurred in Q4 2018. The
Japanese IT company will instead focus on its in-house mining activities
following a comprehensive revenue review.

GMO Internet Downsizing Bitcoin Mining Operations

In a statement Dec. 25, 2018, the IT behemoth announced the shuttering of its cryptocurrency mining hardware business. The decision follows the enormous losses suffered by GMO Internet in Q4 2018 as BTC 00 hit the lowest price in over a year.

After taking into consideration changes in the current business environment, [GMO] expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss.

However, despite shuttering its mining hardware sales department, GMO, which generated a total of ¥154 billion ($1.3 billion USD) in revenue in 2017, expects to continue its in-house mining operations.

Presently, the company admits that a decrease in the profitability of its in-house mining venture. This trend is mostly tied to the falling cryptocurrency prices throughout 2018.

GMO began developing, manufacturing, and selling mining hardware in September of 2017. Back in August, GMO shut down its Bitcoin Cash mining activities to focus solely on mining bitcoin.

Bitcoin Mining Firms Feel the Pinch

For most of the year, as prices fell, Bitcoin hash rate still continued to increase. This translated to increased operational costs for reduced rewards. It was thus only a matter of time before miners began to feel the pinch.

After the mid-November price crash that took BTC down to $3,200, as many as 800,000 (unprofitable) miners reportedly pulled out. However, the Bitcoin mining difficulty has adjusted a since, stabilizing the falling hash rate.

However, cryptocurrencies market woes may not be the core reason for GMO pulling out. According to BitMex Research, the company may not have been competitive to begin with and was thus unable to cope with falling prices.

GMO announces that it no longer plans to develop, manufacture and sell mining machines, as it reports Y36bn of losses related to mining

Cool Vs. Dumpster Hot Air

In a Twitter discussion with cryptocurrency commentator and entrepreneur Tuur Demeester December 25, Buterin debated the pros and cons of two algorithms used by many cryptocurrencies: Proof-of-Work (PoW) and Proof-of-Stake (PoS).

As part of its long-term upgrade schedule, Ethereum plans to transfer from PoW to PoS, with Buterin saying he “doesn’t believe” in the former.

BSV, which plans to use giant block sizes to solve scaling difficulties ‘on chain,’ has faced technical and publicity hurdles since it came into being on November 15.

The altcoin unwittingly became collateral damage from the debate after an advocate requested Buterin’s opinion on it.

The user had claimed the scaling plans from Bitcoin (BTC) developers – specifically ‘off-chain’ scaling via the Lightning Network, was a “joke.”

Buterin slickly disagreed.

“I have my disagreements with the bitcoin roadmap, PoW, etc but they’re trying to do something that’s genuinely cool tech,” he responded.

“BSV is a pure dumpster fire.”

Yeah no, I have my disagreements with the bitcoin roadmap, PoW, etc but they're trying to do something that's genuinely cool tech. BSV is a pure dumpster fire.

“Have a nice life. You will now discover me when pissed off,” he wrote.

BCH, BSV and ETH have meanwhile all staged something of an unlikely recovery over the past week. BCH had led the rally, more than doubling in value to hit more than $200 before correcting nearer to $170. ETH managed $160 from a low of $73.

Do you agree with Vitalik Buterin’s comments? Let us know in the comments below!

It hasn’t been the best of Christmases for the stock markets and let’s face it, Santa hasn’t exactly gone overboard when it comes to crypto. However, according to a CNBC Fast Money interview with Coinbase President Asiff Hirji, it hasn’t been all bad.

A Year of Innovation

When asked what happened to crypto in 2018 after such promise and expectation this time last year, Hirji remindedCNBC that Coinbase warned investors to be cautious.

In fact, in 2017, just when Bitcoin fans were starting to think all their Christmases had come at once, the world’s most regulated exchange dealt a cold blast of reality harsher than a Russian winter reinforcing that prices may be overinflated.

However, he went on to say that there had never been more innovation or institutional buy-in of crypto as there was in 2018, despite the fact that trading volumes were down.

Not for the Faint Hearted

When asked about the BTC price 00 impact and its effect on his business, Hirji began to dance around the issue like any good president saying that years ago, Bitcoin was the only thing that mattered. Then along came Ethereum, and now there are around 3,000 to 4,000 cryptocurrencies out there but that:

There are probably 200 or so that matter.

Despite dealing a harsh hand to the flailing 2,800 cryptos or so that don’t make the grade, he said:

You should assume that (Coinbase) will over the course of time add all the cryptocurrencies that matter in as many geographies as we are allowed to add them.

He affirmed that he was full of expectations for the year ahead and that this was the start of the next great wave in crypto.

What Happened in 2018?

When asked why 2018 failed to deliver the institutional investor boost that everyone hoped would happen, Himji responded that buy-in was at an all-time high:

He added that they needed a valid venue to trade on and a qualified custodian to store with, as well as liquidity, and that Coinbase has the most compliant and regulated solution out there.

Despite the dreadful year of 2018 for retail investors, 2019 would continue to be a good year for institutions going into crypto, he argued.

The Coinbase IPO?

When quizzed about a possible IPO for Coinbase and how its valuation must be affected by the lower prices, he recalled when the company was valued at $8 billion earlier this year, reinforcing that none of the investors were then betting on the price of the asset “today, tomorrow or even a year from now.”

“If that’s your time horizon, as an institutional investor, you shouldn’t be touching this [cryptocurrencies].

But, if you have a long-term constructive view of where crypto is going, we’re [Coinbase is] the best-leveraged bet on crypto that you can find.

Himji did admit, however, that the company’s revenue was directly tied to trading volume and that trading volume was way down, concluding:

We have a long way to go before we do an IPO.

What do you think about the Coinbase president’s comments on investing in crypto? Share your thoughts below!